All Forum Posts by: Austin Fruechting

I've done 4 portfolio deals now that are 3+ properties at once.  (6 units X 3 properties, 28 units X 20 properties, 32 units X 8 properties, and 52 units X 19 properties)

I don't know that the big banks will do it.  I've worked with a smaller community bank that is a portfolio lender and they had no problems with it.  One loan and one insurance policy per portfolio. 

So 1.5 years ago, I was informed about a single property because of automatic alerts from my realtor.  That lead to a large portfolio purchase from the seller.  I did all the work on it and and negotiated with the seller. My realtor never did anything.  I still compensated my realtor in a fashion similar to what your are talking about so he wasn't completely completely cut out (I actually just did a personal check from me to him personally).  He was happy because it was a decent amount and he didn't really do anything at all.  As long as you are compensating your realtor in a reasonable/more than fair fashion for what they have done and time spent I would be ok doing it. Never expect people to work for free for you, and never cut them out if you want to business in the future. The way the seller is treating his realtor is on his conscience and not your problem. 

Yeah definitely not saying you're strategy is bad and that you must refinance.  Everyone has to figure out for themselves what works best with all of their variables.  Most banks count a percentage of the rent towards servicing the debt.  So if it's over a threshold it doesn't count against you as far as qualifying and it will be considered self funding. 

Anyways, absolutely get in to it!  It's the best way to get that steady stream of income you're looking for!

Adding: I would consider refinancing the properties post rehab to move a little quicker as opposed to doing all cash every time. Just as another option to consider.

You are absolutely not too old. My father just turned 60 and based on what he's seen me do, he decided to start investing over the past couple years and is doing tremendous. I believe I can get him to his retirement income goals with another couple deals over the next couple years and everything else is gravy.

Originally posted by @Jarrett C.:

You sir, are #winning. If I'm ever in the area I'll have to bring you some Gregorio's. 

 Why did you not want to market it? The decrease in profit margin?

 Thanks man!  Yeah, I didn't go to market because of the decreased profit margin. With realtors taking 6% on a sales price that I'm sure would end up being a decent chunk below appraisal, and other concessions... then pay regular income taxes on the profit for a flip it doesn't make sense.  I would probably end up with around $14k in my pocket or less if I sold on market.  

So since my bank would do 80% cash out on this one, I end up with about the same or probably even more cash in my pocket than if I sold on the market... and have another property and cashflow!

@Ian Tudor - I'll always be looking.  I love putting deals together.  The difference is now it has to be a decent sized deal before I jump in.  Not really looking at smaller things unless it's for a flip or the deal is just too good. 

UPDATE:

My property managers as well as myself sent this out to some investors to try to sell off market. There were no takers at this time so as opposed to putting it on the market, I am cash-out refinancing and BRRR-ing this (which was always my backup plan).

APPRAISAL: $135,000  - BOOM!!!

I'm getting an 80% cash out refi, so $108,000 out.  That's actually going to net about what I thought I would have after paying income tax on the flip proceeds.  So I'll get my humidor, some additional cigars to fill it, AND keep making money going forward.  

THE NUMBERS (approx):

Purchase: $66,000

Rehab: $23,000

Additional Expenses: ~$5,000 (short term interest/carry/closings)

All in: $94,000

Cash out: $108,000

NET: $14,000 <- CASH IN MY POCKET!!!

...AND I'll cash flow every month going forward!

@Steve K. - I am retired!  I only do this because I want to and I enjoy it! LOL  Plus I don't do the day to day stuff.  

All in all, even with the work that will be done, I imagine this will only add 1-2 hours a month on to my plate during the first two years of doing the work. After that maybe an extra 1/2 hour a month than now.  I just have to set up the initial scope of work for each property with the property managers (which we have already done and discussed what level maximizes our returns. Then my property managers will run the projects whenever something comes vacant.  

Kiyosaki also knew what he was talking about when he talks the importance of a good team!

Hi @Susan V. - nothing special about how I got I started.  I read Rich Dad Poor Dad in fall 2009, did my own mathematical proofs which all pointed to real estate, then just started researching and learning and bought my first property in June 2010.  Then it's snowballed since then.